Why We Approached China For $17Bn Loan

By Chuks Ekpeneru

The Federal Government has given reasons why it is seeking a $17bn loan from China-Exim Bank.

Minister of Finance, Zainab Ahmed while defending the loan request before the Senate on Tuesday said other lending institutions like the World Bank and the African Development Bank were not showing much interest when Nigeria approached them during recession.

The President Muhammadu Buhari administration has purposed to borrow $29.96bn loan to fund critical infrastructure across the country.

Ahmed explained to the Senate Committee on Local and Foreign loans that the 8th National Assembly had approved about $6bn for the Federal Government out of the $29.96bn loan, leaving a balance of $22.8bn.

She said that the Federal Government and some state governments were jointly requesting the loans from various lending institutions.

She disclosed that 70 percent of the loan, which is about $17bn, would come from the China-Exim Bank while others would be sourced from other lending institutions such as the Islamic Development Bank.

She said, “The funds ($22.8bn) will be channeled to the funding of infrastructure, which will enhance the productivity of our economy.

“Other projects are in healthcare and education. It also includes projects for the rehabilitation of the North-East geopolitical zone, which has been ravaged by insurgency.

“Others are the Mambila Hydro Power project ($4.9bn), Lagos-Kano  modernisation rail project ($4.1bn),  the Development Finance project loan being provided by a consortium of World Bank and African Development Bank agencies ($1.28bn).

“Above all, the loan will help us to improve our electricity supply,  reduce poverty, create jobs, ensure access to finance,  agricultural productivity, guarantee food security, achieve high school enrolment, provide clean potable water, rehabilitate major roads and develop the mining industry.”

She further said that the 70 percent coming from China “is meant to make funds available to our own development  institutions so that they can give out loans because access to finance has been difficult for the SMEs.”

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